Still in his twenties, and no longer working on Wall Street, “Baby” is the key government witness in the case against domestic-diva-turned-defendant Stewart and her broker, Bacanovic. Indeed, in the end, the entire case is likely to boil down to a credibility contest: The word of the business-savvy Stewart and Bacanovic against the word of the fresh-faced Faneuil.
After all, the rest of the evidence against Stewart and Bacanovic is circumstantial. And though Judge Miriam Goldman Cedarbaum has remarked that this circumstantial evidence is “strong,” Faneuil’s testimony, as direct evidence, is bound to be stronger. But only if the jury believes it.
Yet the jury may find Faneuil too dramatic to be credible. Last week, Faneuil’s testimony often sounded as if it were taken straight from the movie “Wall Street.” Faneuil seemed to cast himself in the role of Bud Fox — the young, heroic stockbroker who risked his own liberty to expose the ruthless wrongdoings of his superiors.
Of course, “Wall Street” was fiction. But so too may be the testimony of the government’s star witness — and it is up to jurors to decide. Evidence of Faneuil’s admitted drug history is likely to count against him in their credibility determination.
Faneuil has begun a second week of testimony. As he does so, jurors must be wondering: How firmly must I believe him, in order to convict?
In this column, I will argue that the answer to this question is closely related to an odd decision the Stewart prosecutors made: The decision, in what is essentially an insider trading case, not to charge the defendant with insider trading.
Strange indictment fails to charge insider trading
The indictment against Stewart was strange, to say the least. It was a case of a dog that didn’t bark — and the “dog” here was the insider trading charge.
The government alleged that Stewart acted on non-public information when, in December 2001, she sold her nearly four thousand shares of ImClone stock just one day before bad news caused the stock price to tank.
Specifically, the government believes — and Faneuil has testified — that Stewart learned that her friend, and ImClone head, Sam Waksal and his daughter were dumping their shares of ImClone, and therefore decided to dump her own. Who told her? According to Faneuil, he did, but he was reluctantly following Bacanovic’s instructions.